How to File Tax Returns on Rental Income and Real Estate in Georgia

Landlord's Guide to Property Tax and Rental Income Reporting in Georgia

If you own rental property in Georgia, understanding your tax obligations is essential to staying compliant and avoiding penalties. Whether you're renting out a single apartment in Tbilisi or managing multiple properties across the country, this guide will walk you through everything you need to know about filing tax returns on rental income and real estate in Georgia.

Understanding Rental Income Tax in Georgia

Georgia offers one of the most straightforward and favorable tax systems for rental income in the region. The tax treatment depends on whether you're renting residential or commercial property.

Tax Rates for Rental Income

Residential Property Rentals: 5% Tax on Gross Income

If you rent out residential property in Georgia (whether long-term or short-term rentals like Airbnb), you pay just 5% tax on your gross rental income. This is significantly lower than most countries and applies regardless of how many properties you own.

The key advantages of the 5% residential rental tax:

• No expense deductions needed or allowed
• Simple calculation: 5% of all rent received
• Applies to both Georgian residents and non-residents
• Covers long-term tenants and short-term vacation rentals

Commercial Property Rentals: 20% Income Tax

If you rent property to businesses for commercial purposes, the tax rate is 20% on your income. If you're registered as an individual entrepreneur, you can deduct related expenses before calculating the taxable amount.

Important Note: Rental income from residential property cannot be combined with Small Business Status (the 1% tax regime). These are separate tax categories that must be reported differently.

Property Tax in Georgia

Beyond income tax on rental earnings, you'll also need to pay annual property tax on real estate you own in Georgia.

How Property Tax is Calculated

Property tax in Georgia is 1% of the market value of the property. You determine the market value yourself through self-assessment, though you should be honest in your valuation to avoid scrutiny from tax authorities.

Property Tax Rates Based on Household Income

Your household income determines your property tax rate. If your household income is below 40,000 GEL annually, you are exempt from paying property tax. If your income is between 40,000 GEL and 100,000 GEL, the rate will be between 0.05% and 0.2%. If your household income exceeds 100,000 GEL, your property tax rate will be between 0.8% and 1% of the market value.

The actual rate within these ranges also depends on which municipality your property is located in, as local governments have some discretion in setting rates.

Property Tax Payment Deadlines

Property tax declarations must be submitted before November 1st, and payment is due by November 15th of each year. Late payments incur penalties and interest charges, so it's important to pay on time.

Important timing note: If you purchase an apartment in 2024, you will owe property tax on it by November 2025. If you didn't own your property for the full year, the tax will only apply to the months during which you owned the property.

Land Tax

For non-agricultural land, the tax is 0.24 GEL per square meter annually. Unlike property tax on buildings, your household income is irrelevant when calculating tax on land.

Step-by-Step Guide to Filing Your Rental Income Tax Return

Here's a practical walkthrough of how to file your tax returns as a landlord in Georgia:

Step 1: Understand Your Filing Obligations

Individuals renting out residential property must file a personal income tax return by March 31st (now April 1st) of the year following the accounting year.

For example, for rental income earned in 2024, you must file your tax return by April 1, 2025.

Step 2: Keep Detailed Records

Even though you cannot deduct expenses from residential rental income, you still need to maintain organized records:

• Rental agreements with tenants
• Monthly rent payment receipts or bank transfers
• Records of all rental income received
• Dates of occupancy for short-term rentals
• Property tax payment confirmations

Good record-keeping makes tax filing much easier and protects you during potential audits.

Step 3: Calculate Your Tax Liability

For Residential Rentals:

• Add up all rental income received during the year
• Multiply by 5%
• This is your tax liability

Example: You received 12,000 GEL in rental income during 2024. Your tax is 12,000 × 5% = 600 GEL.

For Commercial Rentals:

• If you're registered as an individual entrepreneur, calculate your net income (rental income minus related expenses)
• Multiply by 20%
• If you're not an IE, the business renting from you may handle the tax withholding

Step 4: File Through the RS.ge Portal

Georgia's Revenue Service portal (RS.ge) is where you'll file your tax declarations. The system allows you to:

• Submit your annual rental income declaration
• Pay your taxes electronically
• Track your filing history
• Download confirmations

You'll need either a digital signature or mobile ID to access the portal. If you're not comfortable with the online system, you can visit a Revenue Service office in person or hire a professional accountant.

Step 5: Pay Your Taxes on Time

Rental income tax must be declared and paid by April 1st of the following year. Missing this deadline results in penalties and interest charges.

Special Considerations for Short-Term Rentals

If you're operating short-term rentals through platforms like Airbnb or Booking.com, the same 5% tax rate applies to your residential rental income.

Platform Reporting

International platforms may share your earnings data with Georgian tax authorities as part of information exchange agreements. Always report your income accurately.

Record Keeping for Short-Term Rentals

With short-term rentals, you'll need to track:

• Individual booking dates and amounts
• Guest information (for your records)
• Total monthly and annual income
• Any refunds or cancellations

Consider using accounting software or spreadsheets to maintain accurate records throughout the year.

Tourism Tax Considerations

Depending on your location and the nature of your short-term rental business, there may be additional local tourism taxes or registration requirements. Check with your local municipality for specific regulations in Tbilisi, Batumi, or other cities.

Foreign Property Investments

If you earn rental income from property located outside Georgia, that income is not taxable in Georgia. Georgia's territorial tax system means you only pay tax on Georgian-source income.

Common Mistakes Landlords Make

Avoid these frequent errors when managing your rental income tax obligations:

Not Declaring All Rental Income: Some landlords think small amounts of rental income don't need to be reported. All rental income must be declared, regardless of the amount.

Attempting to Deduct Expenses on Residential Rentals: The 5% tax on residential rental income is on gross income. You cannot deduct maintenance, repairs, or other expenses. The low rate compensates for this.

Missing the April 1st Deadline: Late filing carries penalties. Set calendar reminders or hire professional help to stay on track.

Not Understanding the Difference Between Residential and Commercial Rentals: Make sure you're applying the correct tax rate (5% vs 20%) based on how the property is actually being used.

Confusing Rental Income with Small Business Status: Rental income from residential property cannot be included in the 1% Small Business tax regime. These must be reported separately.

Not Filing Property Tax Declarations: Property tax and rental income tax are separate obligations. You need to file both declarations and make both payments.

Can You Register as an Individual Entrepreneur for Rental Activities?

While you technically can register as an Individual Entrepreneur, rental income from residential property is excluded from Small Business Status activities and cannot benefit from the 1% tax rate.

However, if you're renting commercial property and want to deduct expenses, registering as an IE may be beneficial as it allows you to deduct related costs before calculating your 20% tax liability.

VAT Considerations for Landlords

Most residential landlords in Georgia do not need to register for VAT. However, if you're operating a substantial rental business or renting commercial properties, you should consult with a tax advisor about VAT registration requirements.

VAT registration becomes mandatory if your annual turnover exceeds 100,000 GEL from taxable activities.

When to Hire Professional Help

While filing rental income tax in Georgia is relatively straightforward, there are situations where professional accounting services make sense:

• You own multiple rental properties with both residential and commercial tenants
• You're operating short-term rentals alongside other business activities
• You're unfamiliar with the RS.ge portal and Georgian tax filing procedures
• You don't have time to keep detailed records and file declarations
• You want to ensure full compliance and avoid penalties
• You have complex tax situations involving foreign income or multiple income sources

Professional accountants familiar with Georgian property tax law can save you time, reduce stress, and ensure full compliance with Revenue Service requirements.

Tips for Staying Compliant and Minimizing Tax Liability

Maintain Excellent Records: Even if you can't deduct expenses from residential rentals, good record-keeping protects you during potential audits and makes filing accurate.

Understand Tax Deadlines: Mark these important dates in your calendar:

• April 1st: Rental income tax declaration and payment deadline
• November 1st: Property tax declaration deadline
• November 15th: Property tax payment deadline

Report All Income Accurately: Georgian tax authorities are increasingly sophisticated in tracking income, especially from platforms like Airbnb. Always report honestly.

Don't Mix Personal and Business Finances: Use a dedicated bank account for receiving rental payments, even if it's a separate personal account. This makes tracking income much simpler.

Consider Professional Monthly Accounting: Having an accountant manage your rental income reporting throughout the year ensures accuracy and timely filing.

Stay Informed About Regulatory Changes: Georgian tax laws can evolve. Follow updates from the Revenue Service or work with an accountant who stays current with regulations.

Penalties for Non-Compliance

Failing to declare rental income or pay property taxes can result in:

• Late payment penalties
• Interest charges on unpaid taxes
• Potential audits by the Revenue Service
• Additional fines for intentional non-compliance

The penalties can quickly exceed the amount of tax owed, so it's always better to file accurately and on time.

 

Filing tax returns on rental income and real estate in Georgia is straightforward thanks to the country's simple and favorable tax system. The 5% tax on residential rental income is among the lowest in Europe, and property tax rates are reasonable, especially for those with modest household incomes.

By understanding your obligations, keeping organized records, and filing on time, you can manage your landlord tax responsibilities confidently and take full advantage of Georgia's property-friendly tax environment.

Whether you're just starting with your first rental property or managing an established portfolio, staying compliant with Georgian tax law protects your investment and helps you build long-term wealth through real estate.

If you need support with rental income tax filing, annual tax declarations, property tax compliance, or monthly bookkeeping, our dedicated accounting team is here to help. We specialize in working with property owners and landlords throughout Georgia, ensuring accurate reporting, timely filing, and peace of mind.

 

Need help managing your rental income and property tax obligations in Georgia? Contact us for professional accounting services designed specifically for landlords and property owners. We handle everything from annual tax declarations to ongoing compliance support, so you can focus on growing your rental business with confidence.